The alternative to Labour's fiscal stimulus? Tax cuts!

I've remarked before that every single measure – every single measure- taken by Labour in response to the financial crisis has served to make things worse. So it's hardly surprising that Alistair Darling's tax-and-spend PBR should have been a failure. Don't take my word for it: look at the market reaction (hat-tip, John Redwood).

What's the alternative? The alternative to spending more is, er, spending less. You know, like Ireland. Just ponder the sheer volume of cash we have firehosed at these bail-outs and nationalisations: £131 billion is nine per cent of GDP. As Iain Martin recently mused, that would have allowed for serious tax cuts. We might have abolished corporation tax, scrapped VAT and still had enough to take a couple of pence of income tax. Letting people spend more would surely have had more of a stimulus effect than expanding the state bureaucracy.